PART A

Require description using examples of:

Total variable costs vs variable cost per unit

Marginal cost

Contribution margin

Direct vs indirect costs

Total fixed costs and fixed costs per unit

PART B

Select three of the following types of businesses and perform the following:

Give examples of fixed costs and variable costs that could be incurred by that type of business.

Choose a relevant measure of production or service activity for that type of business, and explain the relationship between the production (or service) output and each of the following:

Ie. Craft brewery: How are fixed costs affected as production volume increased of beer...Fixed costs remain the same ( unless consumer demand requires eventual expansion of operation to accommodate higher yields)

1.total fixed costs,

2.fixed cost per unit,

3.total variable costs, and

4.variable cost per unit.

Types of businesses (choose 3 only):

Steel company

Hospital

University/College

Cell phone manufacturer

Software developer

Auto manufacturer